Will Your Business Become a Statistic?

There's no doubt about it - starting your own enterprise is the biggest risk you can take next to jumping off a burning building.

While some treat business building as a romantic dream of quitting day jobs and rolling in unlimited income, the hard reality sinks in sooner or later. The U.S. Small Business Administration reports that although two thirds of startups survive the 2 year mark, only 44 percent actually make it past that. 

Show Me the Money

The only time you can start calling your entrerprise successful is when you earn your first real income or return on expenses (ROI). For an average small business, it can take a year or more. Getting started requires extensive funding which can become volatile. Chasing opportunites to make your business better to attract your initial customers takes a lot of hard work. 

Factors for Failure

The most common reasons for failure are:

1. Poor planning
    Most entrepreneurs go into business thinking that they will be the boss, but eventually, they find that working for themselves might mean doing everything else. The first months of operation requires setting up a system and doing everything yourself - which can get pretty exhausting.

2. Lack of funds
    Yes, its true. Money really DOES change everything. Although you may be brimming with creativity, you will need a lot of resources and capital to test drive every business technique to get your small business off the ground. Unless you have the right contacts or angel investors, finding money will always be a problem.

3. Weak promotion
    Did you know that the Marx Toy Company (one of the biggest toy companies in the world in the '50s) was said to have folded because of lack of advertising? Finding customers in a cynical world is a challenge and you have to have the guts to put yourself out there to succeed.

Here's a humorous look at the whole situation, with a Theoretical Model included.